Even I don't always agree with my opinion


Starbucks, Tips & Uncle Sam

Posted March 25, 2008 by jim young in Business

– by jim young

So Starbucks has to pay back $106 million to their employees following a California judge’s ruling that they did not have the right to allow supervisors a share in the tips. That’s probably fair.

I have a hard time with some of the “rules” of tipping in the first place, but when I do leave a tip – I’d like to know that the person I’m leaving the tip for is the one getting my money. Because, after all it’s MY money and I should get to choose who I give it to.

A tip is not a cost of the goods or services I am purchasing. It’s a tip. It’s extra. It’s a gesture of free will that I choose to give to my server – or not. I might choose to tip my server for something as simple as a friendly smile or because she has nice tits. That’s my prerogative. Why does the supervisor or even the cook or dishwasher deserve a share in that?

If the people behind the scenes want a share in these tips – they should take the jobs on the front lines where the servers have to put up with the abuse from unfriendly and rude customers.

It’s the cook’s job to cook the food properly and quickly. It’s the dishwasher’s job to wash the dishes and make sure they are clean. And it’s the supervisor’s job to make sure everyone is doing these jobs properly. I shouldn’t have to pay extra for that.

No one tips me in my job whether I perform it well (which I always do) or not and I don’t expect them to.

I shouldn’t have to pay extra to have the food served to me either for that matter, but if I do choose to do so – that’s up to me.

So let Starbucks pay back that money to their employees that should have received it in the first place.

But I’m also a bit suspicious that the government will also be there with their hands out. Undoubtedly income tax will be deducted from the $106 million before it even reaches the employees and that’s not fair either.

To begin with, tips should not be a taxable income. As I pointed out previously a tip is a gift from me to my server for whatever reason and that shouldn’t even classify as an income. The server is not my employee and so a tip should not fall under the definition of income.

But that’s an argument I’m not going to win regardless of how true it may be.

So assuming the $106 million IS in fact a taxable income, hasn’t this money already been taxed? However the split was made between the employees and the supervisors – it was taxable income in the first place and would have already been claimed and taxed upon.

For the government to suggest otherwise would be a charge that all the employees and supervisors were guilty of defrauding the government in the past. And since there is no basis for such a broad claim, then this money should be returned to the Starbucks employees – tax exempt, don’t you think?

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